Hiring ROI: Metrics HR needs to recruit better and faster

62 per cent employers confess to hiring wrong candidates while 53 per cent blame it on the lack of a proper tracking mechanism, according to our new study

Apeksha Kaushik, TimesJobs.com

Businesses are often worried about the expenses they make on hiring and losing a candidate even as 62 per cent also confess to picking wrong candidates!

They do know they are making mistakes but are unsure about the practices that can put a watch on the hiring mechanism.

Focusing on hiring ROI (return on investment) is a useful way to identify these loopholes, check and modify recruitment practices basis calculations and analysis of the ROI report.

However, most organisations see human resources as short-term investments instead of long-term which increases turnover and decreases recruitment ROI.

Although it is difficult to determine the average cost of an employee, says 90 per cent of the surveyed organisations, the 10 per cent, who think it can be measured, say it requires a lot of money and resources. Thus, it is wise to take a note of all of the internal and external expenses organisations have to provide for time and cost of each hiring process for a better recruiting experience.

The problem

The problem lies in the resumes recruiters receive every day and the pressure to fill a position within a deadline. This pressure makes most recruiters(78%) spend less than five minutes on reviewing a resume, finds the TimesJobs study.

In the process, recruiters/hiring managers make many blunders such as unclear job descriptions (55%) and ignoring cultural fitment (40%).

The solution

Over the years, recruitment ROI has become a benchmark to assess hiring success rate. However, it is still a vague figure for many because many organisations have not yet been able to decode the metrics critical to hiring ROI.

To begin, one must be clear about the internal and external expenses/investments on hiring. According to the study, the key internal investments in hiring include interviews, background and reference checks and onboarding.

Once the investments are identified, it is time to recognise and decode the key metrics to measure hiring ROI. Some of the top metrics, according to the study, are time to hire, sourcing/recruitment channel, cost and quality of hire and retention rate.